Page:United States Statutes at Large Volume 78.djvu/121

 78 STAT. ]

PUBLIC LAW 88-272-FEB. 26, 1964

79

" (5) ANNUITIES.—This section shall not apply to any amount the liability for which depends in whole or in part on the life expectancy of one or more individuals and which constitutes an amount received as an annuity to which section 72 ygStat.* 8*21^*^1005. applies." ^ 26 USC 72'. (b) CLERICAL AMENDMENT.—The table of sections for such part is amended by adding at the end thereof the following new item: "Sec. 483. Interest on certain deferred payments." (c) CERTAIN CARRYING CHARGES.—Section 163(b)(1) (relating to ^^ "^^ ^^3. installment purchases where interest charge is not separately stated) is amended— (1) by striking out "personal property is purchased" and inserting in lieu thereof "personal property or educational services are purchased"; and (2) by adding at the end thereof the following new sentence: " For purposes of this paragraph, the term 'educational services' means any service (including lodging) which is purchased from an educational institution (as defined in section 151(e)(4)) 26 USC 151. and which is provided for a student of such institution." (d) EFFECTIVE DATE.—The amendments made by subsections (a) and (b) shall apply to payments made after December 31, 1963, on account of sales or exchanges of property occurring after June -30, 1963, other than any sale or exchange made pursuant to a binding written contract (including an irrevocable written option) entered into before July 1, 1963. The amendments made by subsection (c) shall apply to payments made during taxable years beginning after December 31, 1963. SEC. 225. PERSONAL HOLDING COMPANIES. (a) PERSONAL HOLDING COMPANY TAX RATE.—Section 541 (relating

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to imposition of personal holding company tax) is amended by striking out "tax equal to" and all that follows and inserting in lieu thereof: "tax equal to 70 percent of the undistributed personal holding company income." (b) DEFiNinoN OF PERSONAL HOLDING COMPANY.—Paragraph (1)

of section 542(a) (relating to the gross income requirement for personal holding company purposes) is amended to read as follows: " (1) ADJUSTED ORDINARY GROSS INCOME REQUIREMENT.—At least 60 percent of its adjusted ordinary gross income (as defined in section 543(b)(2)) for the taxable year is personal holding company income (as defined in section 543(a)), and".

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(c) EXCLUDED CORPORATIONS.— (1) DOMESTIC BUILDING AND LOAN ASSOCIATIONS.—Paragraph

(2) of section 542(c) (relating to corporations excepted from the definition of personal holding company) is amended to read as follows: "(2) a bank as defined in section 581, or a domestic building and loan association within the meaning of section 7701(a)'(19) without regard to subparagraphs (D) and (E) thereof;". (2) LENDING AND FINANCE COMPANIES.—Section 542(c) is amended by striking out paragraphs (6), (7), (8), and (9), by renumbering paragraphs (10) and (11) as paragraphs (7) and (8), and by inserting after paragraph (5) the following new paragraph: " (6) a lending or finance company if— " (A) 60 percent or more of its ordinary ^ross income (as defined in section 543(b)(1)) is derived directly from the active and regular conduct of a lending or finance business; " (B) the personal holding company income for the tax-

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